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Job Availability and Restrictions for Workers of Foreign Citizenships in Indonesia

January 10, 2019

Workers with foreign citizenship in Indonesia can apply for skilled based employment opportunities. But, their rights to have a job in Indonesia are regulated before the law.

The Presidential Regulation No. 29/2018 on the Use of Foreign Workers in Indonesia allows relatively easier and faster process of foreign workers’ permit applications. It is not something new for foreign workers that Indonesia used to have quite of the reputation of having some complex issues circulating foreign employment processes.

The issues of the foreign workers in Indonesia are often riddled over work visas, bureaucracy, laws, etc. However, as Indonesia is showing such a trend of growing economy, the foreign workers seem to get even more interested benefitting the fruitful job markets’ of Indonesia.

Knowing that Indonesia still needs people with particularly specialized skills as well as employees with skills that have not been readily available among the Indonesians, the governments have issued regulations and policies that allow foreign workers to choose some attractive options in the country.

Locals’ Concern

Although recently issued policies likely allow more employment opportunities for foreign workers, it does not mean that the foreign workers will dominate the employment proportion in the country. According to the Minister of Manpower, Hanif Dhakiri, there are 85.974 foreign employees in 2017. The number has increased compared to the previous years, and there have been rumors saying that the foreign workers are “stealing” the employment opportunities from the local population.

Yes, the number of foreign employment in Indonesia is rising quantitatively. However, Dhakiri maintained that until the end of 2017, the percentage of foreign workers in Indonesia is less than 0.1% of total nation’s active employment; make it far less in numbers compared to other countries. Moreover, Indonesia’s authorities keep on restricting them from having certain job placement and positions as well as setting higher requirements for them over certain available positions. In short, there is nothing as foreign workers “stealing” jobs from Indonesians.

In fact, it is hoped that such a regulation like the said President Regulation or many other would lead to a rising trend of direct foreign investment in the country. The situation is estimated to create more employment opportunities for the locals. Besides, it is also hoped that the quality of the local human resources will be increasing along with the presence of skilled foreign employees who pass their knowledge to the locals.

Regulations Issued in 2018 on the Use of Foreign Workers in Indonesia

Earlier this year, the President of Indonesia issued a Presidential Decree No.20 of 2018 on The Use of Foreign Workers in Indonesia. The regulation is replacing the previous Presidential Decree No. 72 of 2014 of the same matter.

How does the current regulation has changed from the previous version? Aforementioned, the regulation tries to simplify the permit application process by eliminating some bureaucracy processes. This is especially related to obtaining proper documentation required by the foreign workers before they start making a living in Indonesia. The seem-to-be an endless maze of bureaucracy according to the previous decree is eliminated into a relatively faster and more efficient paperwork process.

Besides the Presidential Decree, another regulation issued was the Minister Decree No.10 of 2018 on the Use of Foreign Workers in Indonesia. The decree explains the ordinances on Foreign Workers in Indonesia specifically and in detail.

The Available and Restricted Employment Positions for Foreign Workers

It is true that there’s a welcoming gesture to workers of foreign citizenship by issuing those regulations. Yet, it does not mean that the Indonesian’s authorities do not put any restriction on them. In fact, according to article 42:4 of the Act of the Republic of Indonesia number 13 of 2013 concerning Manpower, workers of foreign citizenship can be employed in Indonesia in employment relations for certain positions and for a certain period of time only.

This is what later be determined and specified by a Ministerial Decision. In other words, the foreign workers should and are only under allowed employment and having certain positions which aren’t against the law.

Adhering the account on the Ministerial Decree of Manpower and Transmigration Number 40 of 2012 concerning restricted employment positions for the foreign workers, there are 19 employment positions banned for the workers of foreign citizenship, namely:

The Personnel Director;

Industrial Relation Manager;

Human Resource Manager;

Personnel Development Supervisor;

Personnel Recruitment Supervisor;

Personnel Placement Supervisor;

Employee Career Development Supervisor;

Personnel Declare Administrator;

Chief Executive Officer;

Personnel and Careers Specialist;

Personnel Specialist;

Career Advisor;

Job Advisor;

Job Advisor and Counseling;

Employee Mediator;

Job Training Administrator;

Job Interviewer;

Job Analyst;

Occupational Safety Specialist;

Besides positions aforementioned, the article 42:4 of the Act of Manpower of the Republic of Indonesia also emphasizes that the workers of foreign citizenship in Indonesia only involve in certain job positions for a certain amount of time.

Further elaboration of the article 42 is shown on the specific requirements and prerequisites for the foreign workers, which are delegated by the Ministry of Manpower in smaller categories. There are at least five different Ministerial Decisions made under the delegation of the Ministry of Manpower which ordain some available employment opportunities for the foreign workers.

Amongst the Garment Industry

Ministerial Decision of the Ministry of Manpower and Transmigration no. 357 of 2013 concerning certain positions for the workers of foreign citizenship among the primary group of garment industry ordains not only managerial positions but also director and commissioner positions.

The complete available employment opportunities for the workers of foreign citizenship at the primary group of garment industry are namely;

President Commissioner;

President Director;

Financial Director;

Marketing Director;

Commercial Director;

Production Director;

General Manager (except the personnel and administrative positions);

Finance Manager;

Export and Import Manager;

Information and Technology Manager;

Logistic Manager;

Production Planning Inventory Control Manager;

Production Manager;

Material Manager;

Merchandising Manager;

Pattern Manager;

Product Design Manager;

Quality Assurance Manager;

Marketing Manager;

Production Advisor;

Design Advisor;

Financial Advisor;

Marketing Advisor;

Product Design Advisor;

Research and Development Advisor;

Quality Assurance Advisor;

Quality Control Advisor;

Auditor;

Market Research Specialist;

Sewing Specialist;

Cutting Specialist;

Mechanical Maintenance Engineer (in accordance to machine assembly);

Mechanical Engineer (in accordance to machine assembly);

Electrical Engineer (in accordance to machine assembly);

After Sale Service Engineer (in accordance to machine assembly); and

Commissioning Engineer.

Amongst the Non- Machinery/ Appliances Metal Goods

Ministerial Decision of the Ministry of Manpower and Transmigration no. 359 of 2013 concerning certain positions for the workers of foreign citizenship among the primary group of non-machinery/ appliances Metal Goods ordains not only managerial positions but also director and commissioner positions.

The complete available employment opportunities for the workers of foreign citizenship at the primary group of the non-machinery/ Appliances Metal Goods are namely;

President Commissioner;

Commissioner;

Commercial Director;

Production Director;

Marketing Director;

Quality Assurance Director;

Technical Director;

General Director (except the personnel and administrative positions);

Financial Manager;

Marketing Manager;

Sales Manager;

Production Manager;

Electrical Manager;

Material Manager;

Mechanical Manager;

Procurement Manager;

Quality Control Manager;

Marketing Advisor;

Financial Advisor;

Research and Development Advisor;

Production Advisor;

Machinery Maintenance Specialist;

Mechanical Engineer;

Quality Control Engineer;

Production Engineer;

Power Generating Engineer;

Market Research Analyst;

Mechanical Engineer (in accordance to machine assembly);

Mechanical Maintenance Engineer (in accordance to machine assembly);

Electrical Engineer (in accordance to machine assembly);

After Sales Service Engineer (in accordance to machine assembly); and

Commissioning Engineer.

Amongst the Furniture Industry

Ministerial Decision of the Ministry of Manpower and Transmigration no. 14 of 2015 concerning certain positions for the workers of foreign citizenship among Sub-group of Furniture Industry.

The complete available employment opportunities for the workers of foreign citizenship at the sub-group of Furniture Industry are namely:

Commissioner

President Director;

Financial Director;

Marketing Director;

Operational Director;

Production Director;

Technical Director;

Machinery Manager;

Financial Manager;

General Manager;

Production Manager;

Research and Development Manager;

Quality Control Manager;

Marketing Advisor;

Research and Development Advisor;

Machine Engineer;

Design Engineer; and

Quality Control Engineer.

Amongst the Footwear Industry

Ministerial Decision of the Ministry of Manpower and Transmigration no. 15 of 2015 concerning certain positions for the workers of foreign citizenship among Sub-group of Footwear Industry.

The complete available employment opportunities for the workers of foreign citizenship at the sub-group of the Footwear Industry are:

Commissioner;

President Director;

Financial Director;

Production Director;

Marketing Director;

Operational Director;

Technical Director;

Managing Director;

Production Manager;

Financial Manager;

Technical Manager;

Quality Control Manager;

Quality Assurance Manager;

Research and Development Manager;

Export-Import Manager;

Factory Manager;

Production and Inventory Control Manager;

General Manager;

Engineering Manager;

Product Development Manager;

Production Control Manager;

Material Manager;

Pattern Manager;

Marketing Manager;

Merchandising Manager;

Marketing Advisor;

Shoe Sewing Specialist;

Research and Development Advisor;

Cutting Specialist;

Design Advisor;

Factory Advisor;

Mould Advisor;

Procurement Advisor;

Maintenance Engineer;

Quality Control Advisor;

Quality Assurance Advisor;

Chemical Engineer;

Shoe Specialist;

Design Specialist;

Research and Development Advisor;

Pattern Specialist;

Product Planning Engineer;

Leather Specialist;

Machine Engineer;

Production Engineer; and

Material Engineer.

Amongst the Air Transportation Group

Ministerial Decision of the Ministry of Manpower and Transmigration no. 707 of 2012 concerning certain positions for the workers of foreign citizenship among the Transportation and Warehouse, the primary group of Air Transportation.

The complete available employment opportunities for the workers of foreign citizenship at the primary group of Air Transportation are namely:

Commissioner

President Director;

Regional Director;

Assistant Regional Director;

Country Manager;

Regional Manager;

Station Manager;

Traffic Manager;

Flight Operational Manager;

Engineering Manager;

Aircraft Maintenance Manager;

Cargo Manager;

Passenger Manager;

Research and Development Manager;

Finance Manager;

Marketing Manager;

Sales Manager;

Commercial Manager;

Assistant Manager;

Quality Service Manager of Aviation;

General Manager;

Technical Management Advisor;

Flight Engineer;

Aircraft Advisor;

Engineer;

Navigator;

Pilot;

Copilot;

Pilot Instructor;

Simulator Instructor;

Engineering Instructor; and

Flight Attendant (for international flights)

Foreign Director and Commissioner on Local Companies

As you may have noticed, the employment availability for the workers of foreign citizenship also includes the position of commissioners and directors. Considering the fact that the companies of the aforementioned groups or sub-groups are local companies, one obvious question is quickly emerging? How foreign commissioners or directors lead local companies? How Indonesia’s regulate such a situation?

Indeed, there is a specific decree that regulates the highly possible phenomenon. The Ministerial Decree of the Ministry of Manpower number 35 of 2015 concerning the Procedure of the Use of Workers of Foreign Citizenship. The decree does not allow a foreign commissioner or director to lead a company that is fully funded by Indonesians or any legal entities from Indonesia (this refers to PT PMDN).

However, when it is only partially funded, a foreign commissioner or director can actually have a position, just like what might happen in the five industries above.

One directorial position that could not be owned by foreign workers is the Personnel Director as stated in the Ministerial Decree of the Ministry of Manpower and Transmigration no. 40 of 2012. Rather than that and the other non-directorial positions, a foreign commissioner or director on either PT PMDN or PT PMA is legal before the law.

Residence Permit in Indonesia

Another thing that comes into consideration besides the job positions is, in fact, the residence permit in Indonesia. Depending on the job position and how low a foreign worker has been working in Indonesia, there are Temporary Stay Permit or ITAS (Ijin Tinggal Terbatas) and Permanent Stay Permit or ITAP (Ijin Tinggal Tetap).

Both ITAS and ITAP are the Indonesian Visas beside Visit Visas. ITAS can be activated for 6 months, a year, and a two-year stay. Meanwhile, ITAP is a Permanent Residence permit that is valid for 5 years.

Among those who can issue ITAS are foreign investors (the owner of PMA), foreign experts, foreign researchers, foreign priests, retired foreign citizen, and expatriates.

Meanwhile, people who can apply for ITAP are expat spouses with Indonesian citizens, the main shareholder of PMA companies (PT), directors or commissioners, retirees whose age is 55 or older, and former Indonesian citizens intending to be Indonesian again.

There step by step procedure before ones could own an ITAS or ITAP. This article will specifically explain how to apply for ITAP and own a Permanent Residence permit from Indonesia.

Besides the aforementioned people who can be ITAP holders above, the ITAS holders can also issue ITAPs. Among that category are investors, rare foreign experts, top foreign managers, foreign religious figure with duties, foreign spouse of Indonesian husbands or wives, foreign spouse of foreign ITAP holder, legitimate children who hold foreign passport and is joining an Indonesian parent, legitimate unmarried children who are joining parents who are ITAP holders, former Indonesian seeking for Indonesian citizenry, and retired foreigners. These people’s right to be ITAP holders are regulated by article 54 and article 60 of Law No. 6 of 2011 concerning the Immigration that governs this type of stay permit.

Once you are qualified with one of those criteria to be an ITAP holder, you need to prepare documents for the ITAP application. The documents needed are namely;

Original passport and photocopy;

Photocopy of KTP, KITAS, IMTA, or SKTT held in the last three years (for former ITAS holders)

Marriage certificate (for spouse);

Photocopy of Family Certificate or Kartu Keluarga (for the spouse of WNI);

Form Perdim 24 (from the Immigration Office);

Fopr, Form Perdim 27 (from the Immigration Office).

Above are the documents needed for ITAP applicants. Following are documents needed for ITAP application from a company, namely:

Letter with a tax stamp;

Company Business Registration and License (if any);

Annual Report of Employees (if any);

Company’s Foreign Workers Employment Plan (RPTKA);

DPKK funds or the payment evidence of the first-year stay;

Work Permit (if any);

Deed and Ministerial Approval for the Company

Company TAX ID, personal Tax ID, and an ID of Indonesian HR Manager.

After finishing all the application processes and eventually become an ITAP holder, one should be obliged to the article 59:2 of Immigration Law. An ITAP holder must report to the Immigration Office every five years.

How about the cost? According to the expat.com, there are two types of ITAP payment you are going to make; the non-electronic and the electronic ITAP (E-ITAP). Additionally, when it comes to the five-yearly extension, there are also two types of cost extensions namely the non-electric ITAP and the E-ITAP.

How Elson can Help you?ELSON Indonesia is a company that has focus on providing legal solution for expatriates, foreigners, and mixed marriage couples in Indonesia.